November 27, 2008

Delivering value for money versus wasting money in London

The polemic on delivering value for money versus wasting money started by my post today on the cuts in the tourism budget for London has continued on Dave Hill's Guardian London Blog. I posted earlier here my comment on this thread. This evoked a response by the associate editorof Autocar which can be read on Dave Hill's blog. This is my reply, which contrasts the investment in tourism promotion by Ken Livingstone when he was Mayor, which yielded real benefits for Londoners, with the extraordinary waste of money carried out by the present administration. It illustrates also the wider differences between the two administrations

'The intervention of the Associate editor of Autocar (Newsed1) gives an excellent opportunity to explain the difference between what is value for money, policies which were pursued by Ken Livingstone's administration, for example the budget spent on promoting tourism, and what is a waste of money – the ‘new Routemaster' promoted by Autocar, supported by the present administration, and which will waste over £100 million a year of Londoners money.

The budget for tourism and promoting London was excellent value for money because the money spent was exceeded by a huge amount by the money got back in spend by extra visitor numbers – as illustrated in my previous post. That high return translated into incomes and jobs for Londoners. That is, it was an investment for London – an example of the way Ken Livingstone's administration really delivered value for money and why the cuts to the budgets for the promotion of London are so short sighted and damaging.

The waste of money by Boris Johnson's administration has been quite extraordinary. First £50 million a year for the public transport system in London was given up by canceling Ken Livingstone's £25 a day CO2 congestion charge on gas guzzlers – the £50 million a year lost being good news for drivers of gas guzzler but bad news for everyone else. Then £22 million a year, at current exchange rates, was lost by canceling the cheap oil from Venezuela deal. Then, announced today, a minimum £14 million a year (even on the Evening Standards figures) has been lost for public transport by abandoning the Western Extension of the congestion charging zone. So, therefore, so far £86 million a year has been wasted by the present administration on public transport.

However this is exceeded by the more than £100 million a year that all independent studies show would be the cost of the ‘new Routemaster project promoted by Autocar, the Evening Standard, and the present administration.

As a result of these huge losses Londoners are paying far more for their public transport system than they need. And as a result of the cuts in the tourism promotion budget Londoners are going to have less income from visitors and therefore less jobs.

'Both the unnecessary waste of £million a year on transport, and the loss to Londoners of the cuts in the budget for tourism promotion, are examples of how not to run the economic policy of an administration and will be particularly damaging to London in a recession.'